Trailing stops vs that other way

[momentom]

	Quote:	brownsfan019
	Bare with me if you will - I put a 10 ATR on my ES chart now. The value is 1.625. That x3 = 4.875. Now, what does that specific number tell me? Again, sorry for the simple question but I've never gotten into ATR and would like to see how it operates as a trailing stop function.

If you are long then your trailing stop is current price minus 4.875. As the market moves up, trail stop is recalculated after each bar and moved up - never down. The opposite for shorts of course.

Is this OK?

[Nick1984]

I'm confused we went from ATR 10/3 to 10*3?

Say the ATR of the last 10 periods was 100 for simplicities sake, then the stop would be at -30 100/3. You wouldn't have it 10*3 cause that would make a ATR of 100 a 300 point stop. Wouldnt the 10*3 be a your first profit target and 10/3 your first stop?

[brownsfan019]

	Quote:	TinGull
	Yea, I will from here on out. It hadn't been too big of an issue until the past 3-4 weeks. As for the ATR x3...on the YM where I entered a long (5min chart) it shows a 10ATR at 18ish. So you'd multiply that by 3 and use that as your stop?

No idea, we'll have to wait for momentom's response.

[momentom]

	Quote:	Nick1984
	I'm confused we went from ATR 10/3 to 10*3? Say the ATR of the last 10 periods was 100 for simplicities sake, then the stop would be at -30 100/3. You wouldn't have it 10*3 cause that would make a ATR of 100 a 300 point stop. Wouldnt the 10*3 be a your first profit target and 10/3 your first stop?

Guys, back in the post I spoke about an ATR calculated over 10 bars, then taking that number and mutiplying it by 3 as Brown did. I called this the 10/3 ATR as shorthand, 10 and 3 being the input parameters of the ATR Trailing Stop.

Brown then clculated an ATR of 10 periods. I then agreed and said:
Quote:
If you are long then your trailing stop is current price minus 4.875. As the market moves up, trail stop is recalculated after each bar and moved up - never down. The opposite for shorts of course.
Unquote

Nick there was never a calculation of 10 divided by 3 - this would always be 3.333333

Hope this clears it up.

[brownsfan019]

This ATR thing may need it's own thread to be honest, but I appreciate the help momentom. I honestly have never used it or really looked at it, so any help and guidance is appreciated.

Here's a thread dedicated to ATR and I hope momentom can stop by: http://www.traderslaboratory.com/for...html#post18491

[nickm001]

I have found good presentation on stops by Chuck Lebeau. Some of the stops use ATR multiple.. hope it helps... If you use Tradestation, there is a open code for these stops available on forums

[maildigger]

if you trade 2 contracts:

hardstop = x
1st target = x
start traling when x is hit (I use amount x)

[brownsfan019]

	Quote:	nickm001
	I have found good presentation on stops by Chuck Lebeau. Some of the stops use ATR multiple.. hope it helps... If you use Tradestation, there is a open code for these stops available on forums

Thanks for sharing nick. That was actually a pretty good read. I have an idea after reading it... we'll see how it looks.

[TinGull]

Very interesting read!!!

[Jakew]

For my short term (intraday) trades I finally, after much anguish, came up with a hybrid profit exit solution. The exit is a target (always 30 points or about 0,4 of daily ATR - I mean I may adjust the 30 points to say 25 or 35 if daily volatility conditions change a lot, which did not happen over the last 2 years), but... once the target is reached I do not actually exit but apply a very very tight stop leaving it to the luck to either give me my target or continue with that position till the end of the trading day. Still far from perfect but easier on me than a plain target, a trailing stop or a time stop (end of day).